Omgeo and DTCC Partner with the Industry to Develop Global Hub for SSIs
Service to centrally maintain “golden copy” of SSI records for all products and geographies
Omgeo ALERT to be leveraged as core functionality
New York/Boston/London/Hong Kong/Singapore — 17 September 2013 — Omgeo, the global standard for institutional post-trade efficiency, today announced that the firm has partnered with the Depository Trust & Clearing Corporation (DTCC)* to establish a user-governed global repository to store and communicate the “golden copy” of standing settlement instructions (SSIs**) for all products and geographies. This undertaking is part of an overall effort to standardize and centralize key client reference data functions and place them under user governance.
Omgeo ALERTSM, the industry’s largest and most compliant web-based database for the maintenance and communication of SSIs, will serve as the foundation for this service. ALERT will be the comprehensive industry-wide SSI repository and communication hub, coordinating and distributing SSIs between trade counterparties and supporting settlement across all markets and asset classes globally.
The objectives of the initiative include:
1) Promoting 100 percent compliance with local market standards and SSI data quality by enabling global custodians and prime brokers, the ultimate owners of SSI data, to update and maintain accurate “golden copy” SSI details automatically on behalf of their clients.
2) Providing “open access” by establishing standard interfaces to make the ALERT SSI data available to any third-parties such as broker/dealers and third-party transaction service providers meeting objective criteria set forth by user governance.
3) Establishing a robust SSI exception process to manage and resolve SSI-related errors.
4) Continuing to expand ALERT’s capabilities across asset classes and markets with the aim of near 100% coverage in all major jurisdictions.
The first phase of the SSI initiative will be to enable global custodians and prime brokers to update and maintain accurate SSIs in ALERT. This functionality is expected to be implemented in Q1 2014.
By creating a central SSI communications hub, market participants can consolidate SSI information across all counterparties, matching platforms and asset classes into one database, ALERT, thereby reducing risk and cost.
“The ALERT SSI initiative is a tangible example of the efforts being made by the Industry to standardize and centralize key client reference data functions and place them under user governance, with the result that the post-trade area of the financial system will be more efficient, less risky and less costly,” stated Andrew Gray, Managing Director and head of Core Business Management at DTCC, and Chairman of Omgeo’s Board of Managers. “It is well known that inaccurate, non-automated SSIs are a primary reason for trade failures, and this initiative will significantly contribute to significantly improving the control environment in this critical area.”
Mark Bouchea, Executive Director of Product Management at Omgeo, added, “Market participants will benefit from even greater efficiencies and cost reduction in trade processing as ALERT is enhanced to deliver on the promise of serving the industry as its SSI communications hub. The ability to access properly maintained SSIs is a key factor in operational risk mitigation, particularly as the global momentum towards shorter settlement cycles increases. The highest degree of accuracy will be needed in order for firms to adhere to shorter settlement time frames.”
Today, ALERT is the industry’s largest and most compliant web-based SSI database, used by over 1,800 firms globally. The service holds over five million settlement instructions on nearly 500,000 accounts.
*DTCC announced on July 24, 2013 that it entered into a binding agreement to acquire full ownership of Omgeo, combining Thomson Reuter’s 50 percent stake in the company with DTCC’s existing 50 percent ownership.
**SSIs contain the information required to settle trades between counterparties and are a critical component of facilitating shorter settlement cycles. SSIs include data such as account number, currency code, security type, BIC and place of settlement.
Formed in 2001, Omgeo automates trade lifecycle events between investment managers, broker/dealers and custodian banks, enabling 6,500 clients and 80 technology partners in 52 countries around the world to seamlessly connect and interoperate. By automating and streamlining post-trade operations, Omgeo enables clients to accelerate the clearing and settlement of trades, and better manage and reduce their counterparty and credit risk. Omgeo’s strength lies within its global community and its ability to create solutions to enable clients to realize clear returns on their investment strategies, while responding to changing market and regulatory conditions. Across borders, asset classes, and trade lifecycles, Omgeo is the global standard for operational efficiency across the investment industry.
DTCC has operating facilities and data centers around the world and, through its subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions for thousands of institutions worldwide. With 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2012, DTCC’s subsidiaries processed securities transactions valued at approximately US$1.6 quadrillion. Its depository provides custody and asset servicing for securities issues from 131 countries and territories valued at US$37.2 trillion. DTCC’s global trade repositories record more than US$500 trillion in gross notional value of transactions made worldwide.To learn more, please visit www.dtcc.com.